News & Insight

Why the 350 billion pound business relief package is so significant

Jack Stratten

We look at the chancellor's unprecedented cash injection

When Rishi Sunak became Chancellor just over a month ago, in a conservative government with one of the biggest majorities in recent memory, he could never have foreseen quite how stressful his job would become, so quickly. COVID-19 continues to wreak havoc on the economy - and businesses are facing unprecedented pressures.

But unprecedented times call for unprecedented measures. And the chancellor's announcement of £350 billion of business relief funds to help weather this crisis is extraordinary. Many doubted how decisive the government action would be, but 15% of GDP represents a serious commitment to UK business.

Loans, tax breaks, grants, sick pay and more

The £350 billion covers a huge range of measures that are accessible to all kinds of businesses in all manner of situations.

A coronavirus loan will be made available, with the first six months of repayments interest free. Grants to support business rates bills have increased from £3000 to £10,000. All sick pay for COVID-19 sufferers will be covered by the government, and more time will be given to businesses to pay their tax bills.

These are just some of the measures that will be offered to hundreds of thousands of small and larger firms throughout the UK. It can be all too easy in challenging times to criticise government support or doubt the impact it will have, but the scale of this support has to be applauded. The threat to businesses has been recognised, and the money is there to batten down the hatches.

Wartime economics

Economic interventions simply never get anywhere near the scale of this one. £350 billion makes this comparable to the kind of effort you might expect during a war.

Importantly, the chancellor stated that more funding will be released if it's needed, and that the government will do 'whatever it takes' to help businesses get through this. If, as predicted, certain industires like aviation suffer more severely than others and larger firms come close to bankruptcy, the final figure could be much bigger.

But a cliche that has real meaning currently is that everyone is in this together. Few people will get away unscathed from this crisis - and there's a safety in that shared impact. It makes ethical and economic sense for everyone to pull together. More than ever, businesses need customers and customers need businesses.

Here at XLN, we will continue to help small businesses in every way we can - and to champion your cause.